Liberals and Unaffordable Housing: Cause or Effect?

As the Antiplanner noted yesterday, the Washington Post has observed that unaffordable housing markets tend to be in liberal metropolitan areas while conservative metropolitan areas tend to be affordable. This is based on a comparison by Trulia economist Jed Kolko of housing prices (in dollars per square foot) vs. voting for Obama or Romney in the 2012 election.

Note that not all liberal metropolitan areas are expensive while not all inexpensive markets are conservative. But nearly all expensive markets are liberal and nearly all conservative markets are inexpensive. (The one exception, Orange County, California, is partly land-locked by other, more liberal communities.)

New Zealand economist Mish Shedlock asks if this is merely a correlation or does one factor cause the other? His weak conclusion is that “Union work rules, land availability, and building restrictions (or lack thereof) are all likely in play.” In fact, there is plenty of land available in all of the expensive regions; it is just rendered off limits to development by state or local land-use rules.

Beyond this, the Antiplanner suggests that the causal relationship goes in both directions. Liberals are more likely to want to regulate land. But liberals are also more likely to want to live in areas that have heavily regulated land. Thus, California and Oregon weren’t particularly Blue when they first passed land-use laws in the 1960s and 1970s. Ronald Reagan was governor of California when the state passed the California Environmental Quality Act (which put major roadblocks in the way of land development) and when most coastal counties drew their urban-growth boundaries. Republican Tom McCall was governor of Oregon when the state passed its notable land-use law in 1973.

While presidential and gubernatorial elections could swing either way in the California and Oregon of the 1960s through 1980s, today Democrats seem to have firm control of both states. Republicans have almost no say in California state politics, and polls show that Oregon’s incumbent governor is ahead in the polls for Tuesday’s election despite having suffered several major scandals in the past few weeks alone (not to mention the state’s $200 million dysfunctional Obamacare web site, the $190 million wasted on the Columbia River Crossing, and previous failed projects overseen by the governor).

If Democrats are attracted to highly regulated areas, many Republicans are repelled by them. The growth of such regulation in a limited number of states may be one reason why the nation has seen such a strong polarization of “red” and “blue” regions in the past couple of decades.

The Antiplanner would have less of a problem with such regulation if it applied only to liberals. Unfortunately, they want to use the power of the federal government to see it applied to everyone. This proved to be a disaster in Australia, Great Britain, and New Zealand (which is one reason why New Zealand economist Shedlock is so interested in U.S. housing).

Another analysis by Kolko found that the “lost generation” of homeowners (or, rather, people who don’t own homes) isn’t Millennials but the 35- to 54-year-old age class. Many people in this group first bought homes in the boom of the late 1990s and early 2000s, and then lost them to foreclosure in the late 2000s. Unlike most Millennials, many people now in their 50s may not have the opportunity to buy another home in their lifetimes.

What Kolko and Shedlock didn’t mention is that the same land-use restrictions that make housing expensive in some metropolitan areas also make housing prices more volatile. This increases the number of people who will lose their homes during economic downturns. People who bought homes before 1995 were less likely to be underwater after the 2008 financial crisis, and so were less likely to lose their homes.

Some people have accused Millennials of being “cheap” because they haven’t embraced homeownership. In fact, their rate of homeownership isn’t significantly lower than that of previous generations at their age. But they certainly have a good reason to be wary of buying homes in regions where volatility is high. Thus, planners whose policies discourage single-family homeownership (and thus make prices volatile) because, they think, Millennials won’t want to buy homes are creating a self-fulfilling prophecy.


19 thoughts on “Liberals and Unaffordable Housing: Cause or Effect?

  1. ahwr

    First, defining affordability solely based on housing costs is misleading. Transportation costs are generally the second largest expense for households, and they vary significantly. Including them in any definition of affordability is necessary.

    Second, comparing price per square foot is misleading. To maintain a comparable quality of life one could conceivably need a larger home with more private amenities when living in the suburbs or exurbs than when living further in with more public amenities nearby and shorter commutes.

    Requiring large lot single family home ownership as is done in many areas might not be too helpful. More liberal(as in free not blue) land use regulations might do a lot to bring down and stabilize housing costs. AP focuses on the ability to set up a new housing development twenty miles from downtown, with long expensive commutes to most jobs. Maybe tearing down an inner low density suburb – especially those close enough to downtowns to be in city limits – and throwing up higher density housing would be more helpful. Why now let both happen? By tearing down I mean make higher densities legal and letting individuals sell to developers, no force required.

    Mid rise and high rise construction is more expensive than low rise construction, but excluding land costs it can still be affordable if you are making ~40k for a family of four, assuming it is close enough to job centers and recreation for transportation costs to be low.

  2. Frank

    Some people have accused Millennials of being “cheap” because they haven’t embraced homeownership.

    Maybe they haven’t embraced homeownership because they’re indentured servants with massive student loan debt, which keeps them from saving a 20% downpayment and/or being able to get credit.

    The Antiplanner would have less of a problem with such regulation if it applied only to liberals. Unfortunately, they want to use the power of the federal government to see it applied to everyone.

    Oh, please. So do so-called conservatives. They just want to use the power of the federal government and see it applied to everyone in different ways, including drug prohibition, the militarization of police, and the infringement of private property that is immigration control.

    WAKE UP ANTIPLANNER: There is no substantial difference between Republicans’ and Democrats’ use of the state apparatus of control and coercion.

  3. gilfoil

    ahwr, good points. For example, housing is expensive in Silicon Valley not because of restrictions on the far-flung edges, but restrictions on the suburban core, which mandate single-family housing. The NIMBY homeowners stubbornly resist dense infill residential construction. But you won’t catch the Antiplanner hopping on a plane to go down to Silicon Valley to advocate allowing more density in front of the local Tea Party.

  4. Ohai

    you won’t catch the Antiplanner hopping on a plane to go down to Silicon Valley to advocate allowing more density

    gilfoil – Right, but I’m sure the Antiplanner would be happy to fly down and advocate for eliminating San Jose’s, Livermore’s or Dublin’s urban growth boundaries.

    When you point out that those are hinterlands far from employment centers people like JimKarlock will say that the jobs will magically disperse with the people because central cities are “irrelevant.” See, no one lives or works in San Francisco anymore, obviously.

    When you protest that traffic in and around the Bay Area (not just in and out of central cities) already slows to a crawl at commute times Wendell Cox will tell you to stop whining because traffic is much worse elsewhere and anyway, watching your soul drain away while you sit in your car idled by traffic is just a sign of economic prosperity and freedom.

  5. bennett

    Hmmmmm. I wonder if there are any market based reasons that property in Central CA is far more expensive than Houston and many Midwestern cities? Hmmmmm.

  6. ahwr

    Jimkarlock housing close to the urban center has more jobs reachable within XX minutes by auto and transit than jobs on the fringe of the urban area. Some of those jobs are downtown. Plenty more are in secondary CBDs. On average having more jobs within a reasonable commute makes it easier to find a new job if you lose one, or a better job if your boss won’t give you a raise.

  7. Frank

    “Ohai, please tell us what % of bay area employment is in San Francisco?”

    And ahwr steps in and tap dances, spewing even more unsupported assertions. He responds with generalizations such as: “has more jobs”; “XX minutes”; “some of those jobs are downtown”; “on average“.

    ahwr again refuses to provide any actual data or evidence. It’s almost as if he’s pulling this shite out of his arse.

  8. gilfoil

    5 year housing prices (the largest time span that Zillow allows,unfortunately):

    San Francisco CA

    Stockton CA

    Tracy CA

    Odd how SF housing has kept its value over the during the housing crash. If the Antiplanner is right, you’d expect them show more volatility, given the anti-car, anti-freedom, pro-congestion agenda that the liberals have tyranically imposed on the helpless victims trapped in that city.

    Meanwhile, places like Stockton and Tracy have seen their housing values plunge during the housing crisis, even though they have wisely oriented themselves exclusively to private automobiles and have avoided the Smart Growth fads of density and urbanism.

  9. ahwr

    Frank I wasn’t responding to that comment. I was responding to the second comment in this post. Threaded responses would be nice.

    Here’s city/suburb job access by transit by metro area. I’ll get one by auto for you later if I have time. But is it such a wacky assertion to you? That living on the fringe of an urban area leaves you with fewer jobs available to you in a given commute time than living closer to the center?

  10. Frank

    “But is it such a wacky assertion to you? That living on the fringe of an urban area leaves you with fewer jobs available to you in a given commute time than living closer to the center?”

    It is a bit wacky, yes.

    In my situation, I live in a nice neighborhood in Seattle, relatively close to downtown. It takes 20 minutes to drive five miles to the very center of the city. It takes 30 minutes on a bus. Given bus frequency is every 30 minutes, I have to time my departure just right, and may end up waiting (after a walking up a hill 100 ft in elevation) up to half an hour if timing (mine or the bus’s) is off. So, driving=20 minutes (with no traffic). Bus=30 to 55 minutes, depending on timing.

    There are no freeways between my location and downtown. There is one major thoroughfare with a limit of 35 or 40 in stretches, but most roads are arterial routes at 30 mph. And good luck driving 30 mph at rush hour in or near downtown Seattle.

    A 20- to 55-minute drive from a Seattle suburb (Bellevue, Kirkland, Kent, wherever) gives quite a reachable area, especially given proximity to highways and freeways. In that reachable area are many jobs, possibly many more jobs than in the urban core. The AP has shown how many jobs are in major urban cores here. Even common sense dictates that since most of Seattle Metro’s population (and most metro’s populations) do not live in the core, that most jobs would not be in the core.

    Also consider the cost of living in the urban core. Rent is substantially higher than in the suburban areas. A bartender at my local watering hole commutes from Edmonds (14 miles, 26 minutes w/o traffic) to my neighborhood, even though she makes enough to pay for a smaller place here. Why? One reason: because she can have a house with a large yard with a forest behind it in Edmonds, but houses in this ‘hood start at $700k and go all the way up to $5M or more.

    Also consider that non-urban cores often provide high-quality jobs by big employers. Kirkland=Microsoft. Everett=Boeing. Beaverton=Nike. Hillosboro=Intel. Mountain View=Google. Etc.

    Leaving aside wackiness, it’s your obligation to supply support for the assertion that there are fewer jobs available in suburbs than in the urban core.

  11. ahwr

    Frank you misunderstand me. I’m not comparing job accessibility of those living in built up long established suburbs to those living in the city proper. I’m certainly not asserting that there are more jobs in an undefined urban core than there are in the suburbs. For what it’s worth Bellevue and kent are counted as cities in the brookings methodology I linked above. Job distribution and resident distribution are not the same, I don’t know why you imply it is.

    The AP attacks urban growth boundaries that restrain the spatial expansion of developed urban areas. He pushes that land should not be withheld from development, and argues in part that freeing this land for development benefits the poor, because it allows them to buy land at a much lower cost than in existing built up areas, meaning they can buy more land. The implication is that this offers them a better quality of life than living in the city. If the comparison is a little hovel near employment or a moderate sized house far from employment centers than the AP is probably right, the moderate sized house can give a better quality of life for most. Your friend in Edmonds seems to agree.

    But there’s nothing inherent in being close to jobs that means if you are not wealthy you have to live in a tiny apartment. Your hood doesn’t have to have the cheapest units start at 700k. That is a product of a zoning system that restricts housing supply to low density SFH in a very large share of the land surrounding job centers. If you remove those restrictions then the land price per square foot of housing drops, and might drop in absolute terms, though that is less relevant. So the alternative to a house on the urban fringe, where today there are farms, is not just what you can buy today as the AP tries to push, but what you could afford close to jobs without existing restrictions on development. In some cases the farms should be rezoned to permit housing. Especially in the Seattle area there are farming areas close to job centers this is likely to be true. In other metro regions with less spatial restriction on development expanding the urban area further means long commutes to most jobs. It may serve the region and its new residents better to reduce different restrictions on development and allow denser housing where today there is only large lot detached SFH. There are a lot of detached houses near downtown Seattle, UD, and other Seattle job centers today that might better be replaced with higher density housing. You see some of that, housing units in seattle grew from 249k in 1990 to 270k in 2000 to 308k in 2010. 0.8% growth the first decade, 1.2% the second. Prices have only continued to climb. A faster increase, closer to 2% might be needed.

  12. bennett


    The problem with Mr. O’Toole’s housing analysis is that it is absolutist. As a planner/pro-planner I would never argue that planning has no/none/zilch effect on the price of real estate. But people have the need to look at the housing downturn and point the finger at one (and only one) thing and say “This is the culprit!!!” For Mr. O’Toole it is land use planning. To him there is no other factor that contributed to the problems of the 2008 housing market.

    San Francisco has many constraints beyond land use planning that make housing expensive. But to talk about those would be to acknowledge that planners aren’t 100% responsible for all of the ill’s in the universe. Not on this blog!

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